patrick.net

Ruki says

Capital-labor ratio is the percentage capital to labor in a business, industry, or economy. Capital-intensive businesses, industries, or economies have a higher capital-labor ratio than those who are labor-intensive./p>

What the nutshell is for workers:

When there is lots of capital, then labor is in demand and is well-used. When there is not enough capital, labor is in surplus and is underused.

Capital is only a relative concept. There is never "too much" or "not enough" as the total capital (money) in an economy is a made up and meaningless number. All that matters is the distribution of that money.

As I've shown on previous posts, I could run the entire world economy on a single dollar or other unit of currency provided I could arbitrarily divide that unit into smaller parts. And under such a system, there mathematically cannot be any inflation or deflation.

Normalize the currency and you'll see just how inefficient American-style capitalism really is.

Dan8267 says

If you're decent, your income is in the low six figures like the rest of us. As such the Republican taxation policy greatly harms you while benefiting those who produce nothing but play zero-sum financial games. You're marginal tax rate would be about 30-33% whereas Romney's tax rate is about 15%.

How again does the Republican tax plan save you money? They would shift the tax burden even more to production (i.e., normal income).

How do you figure?

http://www.dinkytown.net/java/TaxMargin.html

Your Statutory Rate is about 28% anywhere in the 100K-200K range (really all the way up to high 300s), but the combined rate is maybe 20 or so if you think low 100s.

(Even lower if he's married or has any deductions.)

28% or 33%. I didn't have the tax rates memorized.

It's interesting. The real tax rate most pay is like 14%. I don't know why both sides don't capitalize on that now. Most people confuse the statutory rate with the amount they are taxed (not even understanding the marginal part), so they are surprised at how little they are taxed. Score: Obama

And it would make Romney's low taxes seem less egregious. Score: Romney

That's why I "corrected" the rate. In an age where factless Teabaggers, think they are T.axed E.nough A.lready, I bet most don't know the rate they pay, or what a marginal rate is.

CL says

Dan8267 says

If you're decent, your income is in the low six figures like the rest of us. As such the Republican taxation policy greatly harms you while benefiting those who produce nothing but play zero-sum financial games. You're marginal tax rate would be about 30-33% whereas Romney's tax rate is about 15%.

How again does the Republican tax plan save you money? They would shift the tax burden even more to production (i.e., normal income).

How do you figure?

http://www.dinkytown.net/java/TaxMargin.html

Your Statutory Rate is about 28% anywhere in the 100K-200K range (really all the way up to high 300s), but the combined rate is maybe 20 or so if you think low 100s.

(Even lower if he's married or has any deductions.)

Most 150k-250k families in SFBA will end up in AMT, so the marginal rate is 28%.

But, there is a trick. There's an AMT exemption that phases out from around 150k to 350k, phasing out at 25 cents per dollar of income. This taxes that marginal income at additional 25%. (if you had $100 of exemption, and made $100 more of income, then your exemption goes to $75, so you have $125 more taxable income). This makes the marginal rate effectively 35% for people/families in that range. But once you are over 350k, back to 28%. Unless you make enough so that your 35%-taxed income exceeds the AMT.

The Bush tax cuts didn't do much for AMT. AMT payers are disproportinately in CA, NY, MA, etc. So the Bush tax cuts helped his constituents more than those who voted against him. Very clever.

And CL, you are right, many people misunderstand marginal vs overall rate. That's why you see TEAers talking about how they pay 50% of their income in tax. Realistically a very high income person could get close to 50% marginal rate including state: 35% fed + ~1.5% medicare + 10% CA = 46.5, but not quite 50%. Of course such people have deductions and often get much of their income in capital gains, like Romney. Sadly, those of us with normal jobs do not have the option of taking salary as taxable gains; for us even stock options or stock grants get taxed as normal income.

SiO2 says

And CL, you are right

Ha. The old "broken clock" syndrome. :)

AMT is an issue for FAMILIES in the 150K to 250K range? I'd think single filers maybe.

CL says

Most people confuse the statutory rate with the amount they are taxed (not even understanding the marginal part), so they are surprised at how little they are taxed.

Both your marginal and your average (effective) tax rates are important for different reasons. When deciding whether or not it's worth buying something or working overtime, it's your marginal rate you should consider. When budgeting, it's your effective rate you should consider.

SiO2 says

And CL, you are right, many people misunderstand marginal vs overall rate. That's why you see TEAers talking about how they pay 50% of their income in tax. Realistically a very high income person could get close to 50% marginal rate including state: 35% fed + ~1.5% medicare + 10% CA = 46.5, but not quite 50%

you sit down and add up all the other taxes you pay that comes out of your current earnings.. sales tax, property tax for individuals.. for many who have their own business, they also pay the additional self employer tax. It all adds up!

Dan8267 says

Both your marginal and your average (effective) tax rates are important for different reasons. When deciding whether or not it's worth buying something or working overtime, it's your marginal rate you should consider. When budgeting, it's your effective rate you should consider.

Yeah. I just mean that most Americans (I assume) think that once they hit say a 28% statutory rate that they are paying 28% on their income, not the "last dollar". So they don't know that their combined rate is much lower, since they are also paying 10% down in the lower bracket.